the problem with Sony is they are trying to make the PS3 this set-top box inspite of the fact that it is primarily a game system. for this to work they MUST realize that the overwhelming majority of PS3 purchasers are buying it as a game system, and they should cater to them. gaming should be the utmost goal for Sony with the PS3; all other features should just be treated as additional. when Sony talks PS3 they should talk gaming primarily, not how its a PC or a Blu-ray dvd player. this is where they've lost focus.

Wtf is wrong with you people? PS3 isn't expensive,
PS2 was had same the price in europe. Nad now PS3 has HDD, BD and other stuff that weren't in PS2 and you still call PS3 expensive!
Get a job or something. PS3 isn't for lazy bums.

PS3 will sell through the roof for about a year i reckon, as hardcore and media nut heads rush to clamor their hands all over it. After that however, we could see a different story...

For system specs that were announced at E305 that have been around to almost 07 now, thats almost 2 year old and since then dubbed down tech at that... the price should be cheaper in my opinion!

Killzone = Deal Breaker

i've sat by and read your comments for awhile and i think it's time to voice my opinion.none of you are looking at the big picture.sony,micrsoft and nintendo don't care about you or your loyalty.i think i've played longer than 90% of you.sony is looking at a ten year life cycle.the ps1 sold over 100 million units.second,third system.who cares.that's 100 million systems.ps2 sold over 100 million systems.you bought it a second time,you bought it a third time.that's 100 million plus systems.billions of controllers and games.they(sony) are a business.i love nintendo but they don't think so cleary just like my first love sega.sony is trying to grow the market.beyond hardcore,beyond fanboy,beyond casual.so is microsoft.they have to go after new customers and that means putting more in the box.if you cant afford it,buy something else.that's your choice.trade something in.sell something.you can play games on it,watch hd movies,play nearly all your old games unlike that other company.and yes i have an xbox.love it.surf the internet,download content,hook up with the psp,play nearly all cd types,built in hard drive that's removeable.stop complaining that sony should concentrate on games only.that era is dead just like side scrolling shooters and 2d.both i love.stop complaining and start gaming.you'll hear more from me.(and no i don't work for any of the above companies)

i've sat by and read your comments for awhile and i think it's time to voice my opinion.none of you are looking at the big picture.sony,micrsoft and nintendo don't care about you or your loyalty.i think i've played longer than 90% of you.sony is looking at a ten year life cycle.the ps1 sold over 100 million units.second,third system.who cares.that's 100 million systems.ps2 sold over 100 million systems.you bought it a second time,you bought it a third time.that's 100 million plus systems.billions of controllers and games.they(sony) are a business.i love nintendo but they don't think so cleary just like my first love sega.sony is trying to grow the market.beyond hardcore,beyond fanboy,beyond casual.so is microsoft.they have to go after new customers and that means putting more in the box.if you cant afford it,buy something else.that's your choice.trade something in.sell something.you can play games on it,watch hd movies,play nearly all your old games unlike that other company.and yes i have an xbox.love it.surf the internet,download content,hook up with the psp,play nearly all cd types,built in hard drive that's removeable.stop complaining that sony should concentrate on games only.that era is dead just like side scrolling shooters and 2d.both i love.stop complaining and start gaming.you'll hear more from me.(and no i don't work for any of the above companies)

(here is some good info I got from PS3forums)

Basic Economic Principles
All companies want to make money. Sony is no exception. It is generally a safe assumption that the numerous business managers are aware of economic theories and use them to price their merchandise.

Supply and Demand
One of the most basic principles of economics is that of supply and demand. Supply and demand are often represented as two lines on a graph representing number of units (vertical) versus price (horizontal). As price decreases, demand increases. This is represented by a line that starts high on the left of the graph and drops towards the right. Many people that say Sony should lower price look no further than this. However, there is also supply. Supply is the exact opposite. It begins very low on the left of the graph and moves towards high on the right side. Put simply, at low supply price is small while at high supply price is high. This may seem a bit counter-intuitive but the graph only represents one set of manufacturing capabilities. Upgrading to a bigger plant, for example, would shift the entire supply line. However let’s ignore that for the time being.

The supply and demand lines cross each other. This is the optimum point. At this point the supply equals the demand at that price. Lowering the price means that there is more demand than supply (i.e. people reselling on e-bay for a profit). Increasing the price means there is less demand than supply (i.e. consoles left on the shelf).

So first hole in the Sony should lower the price argument is that supply would also decrease. Let’s move into the why of this.

Console Life Stages
A console initially loses money. In order to make money off a console one needs to build up a large fan base while losing money. The fan base needs to be large enough to carry the system forward until the manufacturing price drops enough that the company starts to make money. At this point the price of the console drops, opening it up to more buyers and the company actually makes money back. Eventually, if the company calculated correctly, they make back enough money to pay off their initial losses. There are three stages of console life.

Stage 1: Console sold at a loss. During this phase of the console’s life, the console costs a lot of money to produce. More than even earlier adopters are willing to pay. The company subsidizes the cost, selling consoles at a loss to get their system on the market. This is especially important for consoles as it is mostly third party products (games) that sell the console. It’s a chicken and egg scenario. Games only get created for a successful console. However, consoles don’t get sold unless there are good games.

Stage 2: Console sold without loss. During this phase of the console’s life, the console costs less money to produce and makes back money on each sale. At this point the company begins to make back the money that it lost during stage 1. The rate at which the console sells is limited mostly by the demand. Consoles with lots of great games sell faster.

Stage 3: Console sold for profit. The console finally has made back the money that it lost. Any further console sales make the company money.

Balancing stages 1, 2 and 3
The goal is to reach stage 3 as soon as possible. This is, after all, when the company makes money. There are two factors that affect this. The first is how many people want to buy the console. The more people buying the console at stage 2, the faster the company makes back its lost money. This would seem to indicate that it is in the companies best interest to sell lots of consoles during stage 1, so there is lots of third party support for the console and therefore, lots of demand for the console. (Represented by demand shifting right.) However, there is also a second factor. The more money lost during stage one, then the more money must be made back during stage 2. Thus it is in the company’s best interests to sell very few consoles at a loss so it has to make back less money.

“But wait, you just said it is in the company’s best interests to sell few consoles and lots of consoles during stage 1. That’s madness.”

This is a balancing act. There is an optimum point, where Sony arrives at stage 3 first. It is done by balancing the need to have a successful console with lots of third party support with the simple fact that Sony can only lose so much money initially. Many people that claim Sony should lower the launch ignore the second half of the equation. They only examine that Sony needs lots of third party support down the line and ignore that the more money it loses initially the longer it takes to make it back.

What’s the Company to Do?
Well the company took all this into account, created a business model and figured out exactly how to maximize their profits. This includes figuring out when to switch between stages 1 and 2 and later 2 and 3. Most importantly for launch cost, the company figures out how much money it should lose initially. Keep in mind that the company will need to make this much money back before it turns a profit.

After determining how much money the company is willing to lose, it examines a supply demand curve. The goal is to maximize the number of consoles sold while keeping the loss constant. Everyone arguing that Sony should reduce cost ignores this entirely. They say Sony will sell more units if they lower cost. This is completely wrong. Sony will sell less units if they lower cost. Here’s why.

Let’s make the following assumptions.
Meryl-Lynch’s 800 dollar per unit is correct.
Let’s ignore the two types of units and just look at the 600 dollar model.

This means that Sony is selling at a 200 dollar loss per console. Multiply this by 2 million initial units and we find that Sony has decided to lose 400 million dollars at launch. This is just launch, not the entire stage one life of the console. This is a lot of money. If Sony were to drop the cost by 100 dollars they would lose 300 dollars per unit instead of 200. In order to keep the 400 million loss constant, Sony would need to sell 1.33 million units. That’s 2/3 the units they were selling before. So lowering cost means that Sony sells less units initially.

It gets even worse. Sony must sell 2/3 the units throughout the entire stage one life of the console. However, this is 2/3s the amount that people would buy at a hundred dollars more. Price dropped demand increased. There are even more people that want to buy the console. This creates a frenzy of people buying consoles and selling them on ebay for high amounts of money. Sony has said it intends to sell 14 million units in the first year. It’s done the market research and knows that 14 million people will buy the console at the current cost. Now it only sells 2/3 this amount and only sells 9.33 million units. That’s almost 5 million people that would have bought it at one hundred dollars more that do not have consoles. Additionally, there is an enormous demand because we need to add in all the people that are willing to buy at 500 dollars.

So now tons of people that want a console don’t have one. There are 2/3 as many consoles in people’s homes as there would have been. This means less demand for third party items. This ultimately stunts the growth of the system. This pushes back stage 2 even further and means it will take longer for Sony to turn a profit.

Conclusions
The people that say, there will be more people willing to buy a console at reduced cost are correct. The people that say Sony should reduce the cost so they can sell more units are wrong. Reducing cost means less units are sold not more. Supply lowers, demand increases. I’m not going to say buy a console at launch if you can’t afford it. However, please stop writing on these forums that Sony should reduce the cost. There is only one way that Sony will announce a price drop. That’s if somehow the production cost decreased unexpectedly. This is the only scenario that will result in a price drop. If anyone has an argument for why they should drop the price beyond ‘so I can save 100 bucks’ I will be happy to hear it. Otherwise you are recommending Sony shoot itself in the foot so you can purchase 2 extra games.

that was a great read -the truth-.i knew there were more intelligent people on this site who think about the big picture.they want to make money,we want great content and systems.some individuals on this site believe that any bad comments they make are going to be read by casual gamers,resellers or real gamers.ps3 is an already soldout item and will continue to sell beyond it's release.so will wii.

I think PS3 price is just right. It could be worst like 799.99 to 899.99. Just think of that.
PLAYSTION 3 for 599.99 Thats a bargain!!!!

2 billion in its first year. Damn. All microsoft has lost is 414 million.

414M is chump change compare to Bill Gates.

Video games and Hip-Hop nowadays is corperate and was out of our hands long ago. I Remember arguing over which game version was better Super nintendo or Genesis now it nothing like that anymore since sony started abusing that Exclusive rights crap cause they funds was long. If Bill gate want to get grimey he could patent online gaming features or buy but sony with his lunch money.

I have and Xbox 360. I paid $400 for it. If I were to go get a stand alone HD movie player I'd pay $500 for the Toshiba HD-DVD (from what I've heard in the news Toshiba is selling it below cost approximately $200 to be exact). Now I've paid a total of $900 dollars for the abililty to play games and watch HD movies on my HDTV. From the way both the HD-DVD and Blu-ray camps have been talking the price ain't coming down any time soon so my hopes for a cheap HD-DVD movie attachment coming soon for my xbox 360 is unlikely.

Let us face the facts, PS3 is a steal. Not only am I saving $300 on my Total HD Entertainment cost, I'm get the added bonus of increasing my game playing options.

Screw buying a stand alone HD movie player. I'm getting me a PS3.

Lets stop being haters and start being gamers.

Peace

Now that Jim Ryan is gone just need to remove Herman Hulst from his position! And maybe give Shuhei the position he deserved.

This gen hasn't been the best for games, last gen consoles are still out there and now there's been talk of the PS6 and Xbox Two for a year or so. Many games this gen will be ported to next gen and the cycle will continue. The re-release of the Neo Geo AES+, games on cartridge for £70 ($95), gaming is going back in time. Gaming has gone pricing mad with the high cost of games, consoles and controllers. The men and women at the top are clueless.

It’s always interesting to hear behind-the-scenes stories like this, especially involving veterans like Shuhei Yoshida and leadership figures like Jim Ryan. That said, there are usually multiple sides to decisions at that level. It could be less about not “listening” and more about differences in long-term vision for PlayStation. Yoshida played a huge role in shaping the brand, so whatever the reason, his impact is undeniable.

If true, and I'm inclined to believe it is, it goes to show that Sony lost their way when they became more western/didn't respect the PlayStation origin story. Andrew House and Jack Tretton did great work, but they also didn't try to fundamentally change the PlayStation DNA. Ryan oversaw the death of Japan Studio and a live service direction.

I already figured this, good lord imagine if Shuhei took over instead, would've been a platinum era 😩

I miss the first three generations of PlayStation. The way they turned PS3 around, we knew they meant business. We were all worried for a bit there around launch. Eventually from 2008 they started shifting slowly. But since Yoshida was fired, it's never been the same. Still enjoy my PS5 daily. I got a backlog dating back to PS2 lol So I'm fine but new games aren't as appealing anymore.

It seems like we were thrown on to the worst timeline possible where everything is too expensive and the wrong people were put in positions that makes the world a shitty place. We could have had Shu as the head of PS but we got the shitty alternative. Same goes for everyone in power around the world. Doesn’t matter the company or country the majority of us got the shitty picks and the world is declining like never before. I do think PS can come out of this because of their studios, talent and IP but they need someone more in touch with gamers leading things like Shu was. They’re still the best place for console gaming imo but it could be much better than it is especially without the massive live service failures. The rest of the world I have a lot less hope for right now. Hopefully the pendulum swings back towards the good ole days but I’m preparing for the worst.

There goes illuminati distraction story

So now there's certifiable proof that Ryan was in fact "fired", as opposed to when it was first announced that he "retired", in order to save face.

There's another guy who recently "retired" as CEO of another large gaming company, after doing a dismantling job as lead for well over a decade.

seems legit, the business man, fires the one who has ideas to move the business forward.

Jim Ryan is the reason why we are entering year 6 since the PS5 launch and many of us don't feel like the PS5 has gotten started as yet.

I hope going forward, we will see a return to form.